The Garraty Company has two bond issues outstanding. Both bonds pay $100 annual interest
plus $1,000 at maturity. Bond L has a maturity of 15 years, and Bond S a maturity of 1 year.
a. What will be the value of each of these bonds when the going rate of interest is (1) 5 percent,
(2) 8 percent, and (3) 12 percent? Assume that there is only one more interest payment
to be made on Bond S.
b. Why does the longer-term (15-year) bond fluctuate more when interest rates change than
does the shorter-term bond (1-year)?
2007-02-09 08:21:27 · 4 answers · asked by **LIBERTY** 1 in Business & Finance ➔ Investing
Are you taking a graduate course in bonds? This is not an easy question to answer. It requires a special calculator. There is one available on the internet. Here is the link. You can work out the value there.
http://www.investopedia.com/calculator/BondPrice.aspx
2007-02-09 08:52:26 · answer #1 · answered by Anonymous · 0⤊ 0⤋
This question doesn't make sense but I am guessing that the bondL has 1400 more dollars in it than bond s. I don't believe I am correct but something to think about isn't it.
2007-02-09 12:36:01 · answer #2 · answered by franksprung 3 · 0⤊ 0⤋
this question does no longer make adventure besides the indisputable fact that i'm guessing that the bondL has 1400 extra dollars in it than bond s. i do no longer think of i'm appropriate besides the indisputable fact that some element to assume approximately isn't it.
2016-09-28 21:32:28 · answer #3 · answered by ? 4 · 0⤊ 0⤋
you lost me at the part about you asking me to do YOUR homework.......
good luck
NOT!!!
2007-02-09 08:30:23 · answer #4 · answered by feellicks 2 · 0⤊ 0⤋